Hopes rise on Labour funding as Lords water down Tories’ trade union bill

Labour has won a key battle in the war to protect its funding from the “partisan attack” of the Tory Trade Union Bill.

Today a Lords committee report called for the changes to be delayed and criticised the “careless” Tory manifesto that produced the proposals.

The Bill could cause the Labour party to lose up to £8m a year in funding – almost 90 per cent of the money they receive from trade unions – by making their political funds “opt-in” rather than “opt-out”. 

Each union which engages in political activity currently maintains these funds, to which members have the option to not contribute.

The Lords committee has said that these proposals should only apply to new members of trade unions, which would lessen the hit to the party’s finances.

They have also advised delaying the introduction of the proposals until discussions concerning political funding had reached an agreement between parties in order to avoid a “tit for tat” conflict when the Conservatives are next in opposition.

Baroness Angela Smith, the Labour leader of the Lords who pushed for the setting up of the special select committee, said: “The report confirms that reversing the current ‘opt-out’ process to ‘opt-in’ would have a huge and significant impact on Labour’s finances. All members of the cross-party committee agree that it would take at least 12 months to implement such proposals, and the majority consider it should only apply to new members.

“With nothing being done to address big donations to the Conservative Party, I hope the report paves the way for a fair, reasonable and lasting agreement on party funding – in stark contrast to David Cameron’s partisan attack on Labour and the trade unions, and by extension democracy itself.”

The House of Lords, where the Conservatives do not have a majority, are to consider the findings of the report and propose amendments to the Bill.

Labour’s funding has also been threatened by the Tories’ proposed cuts to Short Money, as well as a review of constituency boundaries, which will disproportionately cut the number of Labour seats, leading to accusations that they are “rigging the system”.

The Electoral Commission revealed last month that the Tories raised almost twice as much as Labour from non-publicly funded donations, relying on large amounts from a group of under 50 donors. Public opinion is strongly against a political system predominantly funded by private donations.